Japan’s core machinery orders - which exclude volatile items such as ships and electric powe - climbed 3% month-over-month to 941.2 billion JPY in June 2025, snapping a two-month decline and defying market expectations for a 1% drop. The overall gain masked weakness in the manufacturing sector, where orders fell 8.1% to 412.3 billion JPY. Sharp declines were seen in petroleum & coal products (-68.6%), non-ferrous metals (-48%), and iron & steel (-27.4%). By contrast, non-manufacturing orders surged 8.8% to 521.4 billion JPY, driven by robust demand in goods leasing (41%) and agriculture, forestry & fishing (12.4%). On a yearly basis, private-sector machinery orders advanced 7.6% in June, picking up from May’s 4.4% increase and beating forecasts of 5%. Core machinery orders are regarded as a key, though volatile, leading indicator of capital spending over the next six to nine months.